From the following data (Rs crore), calculate National Income:
| Item | Amount |
|---|---|
| Final consumption expenditure | 4,000 |
| Investment expenditure | 1,200 |
| Government final expenditure | 900 |
| Exports | 500 |
| Imports | 700 |
| Depreciation | 400 |
| Net product taxes | 450 |
| Net production taxes | 50 |
| Net factor income from abroad | (−) 80 |
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs 4,920 crore
Given:
C = 4,000
I = 1,200
G = 900
X = 500
M = 700
Depreciation = 400
Net product taxes = 450
Net production taxes = 50
NFIA = −80
National income is NNP at factor cost. Find GDP by the expenditure method, then adjust step by step.
GDPMP = 4,000 + 1,200 + 900 + 500 − 700 = 5,900
NDPMP = 5,900 − 400 = 5,500
NDPFC = 5,500 − 450 − 50 = 5,000
NI = NDPFC + NFIA = 5,000 + (−80) = Rs 4,920 crore
Rs 5,000 crore stops at NDP at factor cost. NFIA is negative here, so it lowers the total.
NCERT (2026-27): “We know, GDP ≡ Sum total of all the final expenditure received by the firms in the economy. In other words GDP ≡ … C + Ι + G + X – M (2.4) Equation (2.4) expresses GDP according to the expenditure method.” “Table 2.4: Basic National Income Aggregates NDP at factor cost is the income earned by the factors in the form of wages, profits, rent, interest, etc., within the domestic territory of a country.” “Table 2.4: Basic National Income Aggregates … It is the National Product and is not bound by production in the national boundaries. It is the net domestic factor income added with the net factor income from abroad.” |